War Bond

Zarko Valjarevic 04.06.2014.

War Bonds

There are many securities that are interesting and that draw attention in everyday life, but I decided to write about odd debt security that is in my opinion very important and interesting as well despite the fact that it is not used often- war bonds. War bond, as the name says itself is a debt security that is issued in times of war. Issued by a government, war bonds cover military expenses as well as other expenses during the war. In this short paper, I will discuss about history of the war bond, the reason that this bond exist, and how it works. So let’s start with the history, and early use of war bonds that goes way back in 1812.

The first use of the war bond was in War of 1812 where $11 million was issued by US Congress to fund that war. Later on war bond became much popular, and in the World War I was used by Germany, Canada, United States, United Kingdom and Austria-Hungary. In Germany, prime investors to raising the war bond were not individuals, like in many other countries. In Germany, most of the money came from universities, industries and local banks, and that was their way of showing how much of a patriot they are. They raised roughly 10 million marks, which as enough to cover around 70 percent of the war related expenses. Use of the war bond completely expanded in the II World War. Almost every country that was involved in war was issuing war bonds. In Memorandum 1943 I found interesting quote: “There was a time when our advertising . . . was simply a constant dinning of the phrase, “Buy More Bonds,” “Buy More Bonds.” This was like saying “Eat more bread,” and after a while people began to wonder why they should eat more bread.” (1) Every country was strongly encouraging their citizen to buy more bond because that way they would be able to raise more money and increase their chances of...